LKQ Corporation Class Action Lawsuit – LKQ

Introduction

A securities class action lawsuit has been filed against LKQ Corporation and certain of its current and former senior executives by the City of Miami General Employees' & Sanitation Employees' Retirement Trust. The lawsuit covers investors who purchased or acquired LKQ common stock between February 27, 2023 and July 23, 2025, inclusive. The complaint alleges that defendants made materially false and misleading statements about the success and strategic benefits of LKQ's approximately $2.1 billion acquisition of Uni-Select, including its U.S. subsidiary FinishMaster, while concealing that FinishMaster was losing major customers and market share from the time the acquisition was announced. As the truth about deteriorating performance in LKQ's North American segment emerged through a series of disclosures between April 2024 and July 2025, LKQ's stock price suffered cumulative declines totaling over $24 per share, causing significant losses for investors.

Company Profile

LKQ Corporation is a global distributor of alternative collision replacement parts, recycled engines, and other vehicle components for the repair of automobiles, headquartered in Antioch, Tennessee. The Company's common stock trades on the NASDAQ under the ticker symbol LKQ.

Class Period

February 27, 2023 – July 23, 2025, inclusive.

Investors who purchased or acquired LKQ Corporation (LKQ) securities during the Class Period may be entitled to seek recovery under the federal securities laws.

Allegations

The complaint alleges that beginning on February 27, 2023, when LKQ announced a definitive agreement to acquire competitor Uni-Select for approximately $2.1 billion, defendants launched a campaign of materially false and misleading statements about the acquisition's strategic value. Uni-Select's U.S. subsidiary, FinishMaster, operated approximately 200 automotive refinish and painting service locations that accounted for roughly 40% of Uni-Select's annual revenue. In its press release announcing the acquisition, LKQ represented that the deal was a "compelling strategic fit" that would "enhance LKQ's business and drive profitable growth" with "minimal integration risk." Defendant Zarcone, then CEO, further assured analysts that LKQ was "highly confident" it would capture $55 million in cost synergies within three years.

As the integration progressed through 2023 and into 2024, defendants allegedly continued to misrepresent FinishMaster's performance. On the October 2023 third-quarter earnings call, after the acquisition closed in August 2023, Defendant Zarcone described the deal as a "bespoke and highly synergistic opportunity" that would "further widen the competitive moat around our North American business." On the same earnings call, Defendant Rick Galloway, CFO, told investors the team was "accelerating synergies related to FinishMaster branches" and expressed confidence the transaction would be accretive in 2024. By February 2024, Defendant Justin Jude, who would succeed Zarcone as CEO, declared the integration was "ahead of schedule" and that LKQ was "confident in our ability to exceed the $55 million of synergies previously disclosed." Even on April 23, 2024, the same day LKQ slashed its financial guidance, Jude insisted the acquisition would "enable us to widen the moat around our North American business and capitalize on revenue synergies."

According to the complaint, these statements were false because FinishMaster was losing major customers and market share from the time the acquisition was first announced, and those losses only worsened as the integration proceeded. LKQ later revealed in October 2024 that customer losses began "pre-acquisition or pre-closing and leading into post-acquisition." The complaint alleges defendants knew or recklessly disregarded these facts. Defendant Zarcone discussed trends in FinishMaster's customer base as early as October 2023, acknowledging the team had a full picture of the business's records, yet failed to disclose the customer attrition. Zarcone, who oversaw the acquisition and departed in June 2024 as the truth began surfacing, sold over $14 million of his personally held LKQ shares. After each partial disclosure, defendants allegedly continued to reassure investors, claiming FinishMaster had "helped improve our margins," that business had "stabilized," and that the integration delivered "a higher level of synergies than originally planned," even as FinishMaster's deterioration continued to erode LKQ's North American segment results.

The Truth Emerges

The truth about FinishMaster's deteriorating performance emerged through a series of disclosures spanning more than a year. On April 23, 2024, LKQ lowered both its revenue and earnings guidance for fiscal year 2024, attributing the reduction to worsening performance in its North American segment, where FinishMaster was being integrated. The Company blamed slowing demand and warmer weather, but simultaneously announced the departure of CEO Zarcone, who had overseen the acquisition. On July 25, 2024, LKQ reported disappointing second-quarter 2024 earnings, revealing it had missed the reduced revenue targets set only one quarter earlier, and further cut its financial guidance. Then, on October 24, 2024, the Company made its most direct admission: FinishMaster's recent earnings misses were driven by significant customer losses that began before the acquisition even closed. Defendants acknowledged these losses started "pre-acquisition or pre-closing and leading into post-acquisition," directly contradicting months of reassurances about the deal's strategic benefits.

Despite these admissions, defendants continued to misrepresent the trajectory of the business. As late as February 2025, Defendant Jude boasted that the North American team had delivered the integration "faster than expected" with "a higher level of synergies than originally planned." On April 24, 2025, however, LKQ revealed that its Wholesale North America segment missed quarterly revenue targets by approximately $200 million and missed adjusted EBITDA margin targets by $24 million, suffering a year-over-year EBITDA decline of 9%, as competitors continued to take market share by undercutting LKQ on price. Finally, on July 24, 2025, LKQ reported that the segment's margin deterioration had continued, with EBITDA targets missed by approximately $20 million and a year-over-year EBITDA decline of 11%, driven predominantly by business losses from increased competition.

Market Reaction

LKQ's stock price suffered a series of significant declines as the scope of FinishMaster's customer losses and the deterioration of the North American segment became clear. On April 23, 2024, following the lowered guidance and CEO departure announcement, LKQ shares fell $7.28 per share, or 14.9%. On July 25, 2024, after the Company missed its already-reduced revenue targets and further cut guidance, the stock dropped another $5.53 per share, or 12.4%. On April 24, 2025, when LKQ disclosed that its North American segment had missed revenue targets by approximately $200 million and EBITDA margin targets by $24 million, shares declined $4.87 per share, or 11.6%. The final disclosure on July 24, 2025, revealing continued margin deterioration and an 11% year-over-year EBITDA decline driven by competitive losses, sent the stock down $6.88 per share, or 17.8%. In total, these corrective disclosures resulted in cumulative per-share declines exceeding $24.

Next Steps

●       Lead Plaintiff Deadline: June 22, 2026

●       The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.

●       The Court will then consider motion for class certification.

●      The Court will later consider a motion to dismiss.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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